Meta’s AI Ambitions: A High-Stakes Bet on the Future

Meta Platforms, Inc. delivered a robust quarterly performance, yet simultaneously unveiled an investment roadmap of staggering proportions. The company plans to allocate up to $135 billion in capital expenditures for 2026, a sum focused predominantly on artificial intelligence infrastructure. This dynamic—a thriving core business financing an expensive technological build-out—has become the central narrative for the social media giant.

The company's fourth-quarter results for 2025 surpassed market forecasts for both revenue and profit. The advertising division remained the unequivocal cornerstone of its success, generating approximately 97% of total quarterly revenue.

This strength was fueled by a dual-pronged advantage: an increase in the volume of ads delivered and a rise in their average price. Ad impressions grew by 18% year-over-year, while the average price per ad increased by 6%. This indicates not only stable demand within the digital ad market but also Meta's enhanced ability to monetize its platforms effectively.

For the full year 2025, the company posted significant growth, with revenue climbing 22% and operating income rising 20% compared to 2024. User metrics held steady, with Daily Active People across Meta's Family of Apps reaching 3.58 billion in December, meeting analyst expectations.

A Soaring Capital Expenditure Forecast

The forward-looking guidance captured significant attention. Meta anticipates capital expenditures (CapEx) to reach between $115 billion and $135 billion in 2026, a substantial jump from the $72.22 billion spent in 2025. According to the company's investor release, this increase is "driven by greater investments" in its Meta Superintelligence Labs and core business areas.

Concurrently, total expenses for 2026 are projected to be in the range of $162 billion to $169 billion. The primary drivers of this cost growth are expected to be infrastructure-related: third-party cloud capacity, depreciation, and ongoing operational expenses. The message is unambiguous: Meta is constructing the computational and data foundation for its AI future, a venture that carries a significant short-term price tag.

Should investors sell immediately? Or is it worth buying Meta?

Key Financial Highlights:
* Q1 Revenue Guidance: $53.5 to $56.5 billion (above expectations of $51.41 billion)
* 2026 CapEx Outlook: $115 to $135 billion (2025: $72.22 billion)
* Major 2026 Cost Drivers: Infrastructure (cloud, depreciation, operations)

Reality Labs: A Persistent Drag on Profitability

The Reality Labs segment continued to report substantial losses. It recorded an operating loss of $6.02 billion on $955 million in revenue during the fourth quarter. For the entirety of 2025, operating losses totaled $19.19 billion.

Management expects losses in 2026 to remain in a range similar to 2025. However, the company suggested that 2026 could represent the peak loss year for the segment, with the financial burden gradually decreasing thereafter. Investors hoping for improved margins from this division will need to exercise patience.

Reflecting this mixed outlook, Meta's stock recently hit a new 52-week high of $719.00. This surge appears to be a direct response to the better-than-expected Q4 figures and the strong revenue forecast for the current quarter.

The immediate challenge for Meta will be to confirm the sustained strength of its advertising business in Q1. Simultaneously, it must convincingly articulate to investors that its massive AI investment plan for 2026 will translate into more than just revenue potential, ultimately supporting the company's medium- to long-term profitability.